Teneo AI (TENEO) Q1 2025 earnings summary

Executive summary

• Achieved 185% year-over-year growth in SaaS API call revenues and 101% growth in SaaS ARR for Q1 2025, with total ARR up 51% compared to Q1 2024.

• Gross margin maintained at 86% for the second consecutive quarter, reflecting SaaS model efficiency.

• Renewed major MSAs and agreements with clients including Global Tech, Medtronic, AT&T, and Swisscom, achieving price increases for lower-volume clients.

• Built a robust sales pipeline, especially in the U.S., supported by a newly hired team and strategic partnerships, with the pipeline more than doubling since Q4 2024.

• Completed a SEK 60 million directed share issue, fueling U.S. expansion and sales organization build-out.

Financial highlights

• SaaS API call revenues were 14.6 MSEK, up 185% YoY; SaaS API call volumes reached 60.6 million (+154% YoY).

• SaaS ARR was 74.7 MSEK (+101% YoY); total ARR reached 101.1 MSEK (+51% YoY).

• Recurring revenues totaled 25.3 MSEK (+49% YoY); net sales were 25.3 MSEK (+47% YoY).

• Adjusted EBITDA improved to -1.4 MSEK from -8.4 MSEK YoY, with continued cost control despite increased investments.

• Cash and bank position at quarter-end was 53.9 MSEK, or 63.6 MSEK adjusted for late payments.

Outlook and guidance

• Targeting >200 MSEK in ARR during 2025, requiring several large customer wins from the current pipeline.

• Expecting a "hockey stick" ARR growth pattern after summer, with revenue from recent deals anticipated in Q3.

• Continued investment in sales and marketing, particularly in the U.S., with OPEX run rate expected to increase by approximately 10% versus Q4 2024.

• Board expects current cash position and recent share issue to adequately address group cash requirements.

• Long-term EBITA margin target exceeding 30% in a mature state.